Yahoo Finance Amphenol Corporation (NYSE:APH): Does The -4.1% Earnings Drop Reflect A Longer Term Trend?
For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on Amphenol Corporation (NYSE:APH) useful as an attempt to give more color around how Amphenol is currently performing.
See our latest analysis for Amphenol
How Did APH's Recent Performance Stack Up Against Its Past?
APH's trailing twelve-month earnings (from 31 December 2019) of US$1.2b has declined by -4.1% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 10%, indicating the rate at which APH is growing has slowed down. Why is this? Let's examine what's going on with margins and whether the rest of the industry is facing the same headwind.
In terms of returns from investment, Amphenol has invested its equity funds well leading to a 25% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 12% exceeds the US Electronic industry of 6.3%, indicating Amphenol has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Amphenol’s debt level, has increased over the past 3 years from 18% to 19%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 90% to 78% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors affecting its business. I suggest you continue to research Amphenol to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for APH’s future growth? Take a look at our free research report of analyst consensus for APH’s outlook.
Financial Health: Are APH’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
